Kiran Raj

The Supreme Court Division Bench of Justice J.B. Pardiwala and Justice K.V. Viswanathan held that an appellate court may grant interim relief even when the underlying suit has been dismissed, setting aside the Gujarat High Court’s order that had declined a request to maintain status quo over the disputed property. The case arose from allegations that consent decrees relating to immovable property were procured through fraud, leading the plaintiff to seek interim protection during the pendency of the first appeal. The Court reiterated through its observations that dismissal of a suit does not bar the appellate forum from issuing appropriate interim directions. It restored the matter to the District Court for fresh consideration of the status quo application, with the Supreme Court’s interim protection to continue meanwhile.

The dispute arose from two civil suits instituted by the plaintiffs challenging consent decrees relating to immovable property on the allegation that those decrees had been obtained through fraud. One of the suits was allowed, resulting in the cancellation of the contested consent decree, while the other suit was dismissed. The plaintiffs, aggrieved by the dismissal of the second suit, preferred an appeal before the District Court and sought an interim direction to maintain status quo over the property pending adjudication of the appeal.

Also Read: 'Indian Courts Have No Jurisdiction To Appoint Arbitrator For Foreign-Seated Arbitration': Supreme Court Dismisses Section 11 Petition Under A & C Act In Buyer–Seller Agreement Dispute Seated In Benin

Before the appellate court, the plaintiffs contended that interim protection was necessary to prevent alteration of the property’s nature, character, or possession while the appeal remained pending. They emphasised that the issues raised involved allegations of fraudulent conduct underlying the consent decree and that the property required preservation until the appeal was decided on merits.

The defendants opposed the request, asserting that the dismissal of the original suit foreclosed any claim to interim relief and that no substantial loss could occur because there was no executable decree against the plaintiffs. The appellate court examined provisions relating to interim relief, including considerations under procedural law governing stays and interim orders, and interpreted them as not permitting relief once the suit had been dismissed. This view was subsequently affirmed by the High Court.

The Court observed that the view taken by both the first appellate court and the High Court was incorrect. It stated that “just because the original suit came to be dismissed, that does not mean that in the pending appeal, the appellate court cannot grant appropriate relief as prayed for.” It clarified that although interim protection may still be granted, the appellant must establish more than a prima facie basis for such relief on the merits of the case.

The Bench recorded that the appellate court’s reasoning rested on an erroneous interpretation of provisions governing stay of execution. It stated that “what we do not approve is the statement of law that once the suit is dismissed, no interim relief could be granted pending the appeal preferred against such judgment and order passed by the trial court.” It further observed that “the reliance placed by the first appellate court on Order XLI Rule 5, while declining to grant status quo, is grossly misplaced,” noting that those considerations relate only to situations involving the execution of a decree.

The Court outlined the proper scope of appellate powers, stating that “an appeal is considered a continuation of the original suit, and the appellate court has co-extensive power to grant appropriate interim relief to prevent irreparable injury and preserve the status quo pending the final disposal of the appeal.” It added an illustration to clarify the legal position, observing that “in a suit for specific performance concerning an immovable property, if the relief sought is not granted and the aggrieved party appeals, then an application seeking to maintain the status quo filed before the appellate court cannot be dismissed solely because the suit for specific performance stood dismissed.”

The Bench also recorded that interim protection is designed to support the main relief and preserve the subject matter during the pendency of appellate proceedings. It noted that the appellate court must apply settled principles governing interim relief—including prima facie case, irreparable injury, and balance of convenience—and assess the potential injury to both sides. It stated that “the appellate court must independently consider the application for interim relief pending final disposal of the appeal on its own merits and the established legal principles” and further recorded that “it should not just look into the final outcome of the suit.”

Also Read: Reassessment Against Non-Existent Entity ‘Illegal And Bad-In-Law’; Bombay High Court Quashes Section 148 Notice Issued To Company After Conversion Into LLP Under Income Tax Act

The Court directed: “the impugned order passed by the High Court is set aside. So also the order passed by the District Court dated 25.11.2024 is set aside. We deem fit to remit the matter to the District Court for fresh hearing of the original application-Exhibit-5 in Regular Civil Appeal No. 205 of 2024. The appellate court shall hear all the parties concerned afresh and pass an appropriate order on its own merits in accordance with law. Let Exhibit-5 application filed in Regular Civil Appeal No. 205 of 2024 be heard and disposed of within a period of two months from today. Till the disposal of the Exhibit 5, referred to above, the interim order passed by this Court shall continue to operate.”

“The parties shall appear before the District Court on 1st December, 2025 and produce this order passed by us today. On production of this order, the court concerned shall fix one particular date for fresh hearing of the Exhibit-5 application filed in Regular Civil Appeal No. 205 of 2024. With the aforesaid, this appeal stands disposed of. Pending application(s), if any, stands disposed of.”

Advocates Representing the Parties

For the Petitioners: Mr. Nirav K. Majmudar, Adv. Mr. Priank Adhyaru, Adv. Mr. Sangam Lal Pandey, Adv. Mr. Rameshwar Prasad Goyal, AOR
For the Respondents: None appeared

Case Title: Mohammadhanif Mohammadibrahim Patel & Ors. v. Pallaviben Rajendra Kumar Patel & Ors.
Neutral Citation: 2025 INSC 1347
Case Number: Civil Appeal No. ……... of 2025 (@ Special Leave Petition (C) No. 27549/2025)
Bench: Justice J.B. Pardiwala, Justice K.V. Viswanathan